In the case of DELHI TRANSPORT CORPORATION vs. DTC MAZDOOR CONGRESS, a group of employees from the Delhi Transport Corporation had their employment terminated under Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment & Service) Regulations, 1952. This action prompted the affected employees and their labor union to file a Writ petition challenging the constitutionality of Regulation 9(b). The central issue in the Delhi Transport Corporation v. D.T.C. Mazdoor Congress case revolved around the constitutional validity of an employer’s right to terminate the services of permanent employees without conducting an investigation, under specific circumstances, with reasonable notice or payment in lieu of notice.
The judicial panel comprised Chief Justice Mukharji Sabyasachi, Justices Ray B.C., Sharma L.M., Sawant P.B., and Ramaswamy K.
Relevant legal provisions included Section 2(g) and Section 23 of the Indian Contract Act, 1872.
Facts:
The Delhi Transport Corporation (DTC) issued termination notices to several employees citing Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment & Service) Regulations, 1952. The grounds for termination included alleged inefficiency and incitement of other employees to refuse work.
In response, the affected employees and their labor union filed a writ petition in the Delhi High Court, challenging the constitutionality of Regulation 9(b). The High Court declared Regulation 9(b) unconstitutional, asserting that it granted management absolute and arbitrary powers to terminate the services of permanent or temporary employees, thus violating Article 14 of the Constitution. Consequently, the DTC appealed to the Supreme Court.
Key Issues:
- Was Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952 arbitrary, unlawful, discriminatory, and in violation of due process, rendering it constitutionally invalid?
- Could Regulation 9(b) be interpreted and applied in a manner that would render it non-discriminatory and non-arbitrary, thereby not granting unchecked power to the Corporation to terminate employees’ services for any reason?
Arguments:
The appellant (DTC) argued that Regulation 9(b) provided sufficient guidance, and its power of termination, when properly interpreted, would not be arbitrary or in violation of Article 14. The appellant also contended that the Contract of Service empowered it to terminate employees under the ordinary law of “master and servant.” They argued that such a contract was void under Section 23 of the Indian Contract Act or contrary to public policy but was nonetheless legal. The appellant claimed that as the master, the Corporation had unrestricted authority to terminate contracts for the efficient operation of the Corporation or to maintain employee discipline.
The respondents argued that any rule allowing termination on notice for a specified period was in violation of Article 14, as it granted the authority arbitrary and unrestrained power. They contended that the state action violated the principle of natural justice, thereby violating Article 14, Article 19, and Article 21. The respondents further argued that a clause allowing an employer to terminate an employee’s services without guidance or reasons violated various constitutional provisions and principles of natural justice.
Legal Reasoning:
Justice Sabyasachi Mukharji emphasized that a violation of natural justice equates to arbitrariness and discrimination. Discrimination, when stemming from state action, constitutes a violation of Article 14. Furthermore, the principles of natural justice apply not only to legislative and state actions but also to any body charged with making decisions, even if it does not qualify as a “State” under Article 12.
Decision:
The Supreme Court ruled that the subsequent Rules and Regulations enacted under the Delhi Transport Act, 1950, did not provide reasonable justification for terminating employees’ services and also violated Article 14 of the Indian Constitution. The “audi alteram partem” rule, enforcing equality as per Article 14, applied not only to quasi-judicial orders but also to administrative orders that adversely affected a party, unless expressly excluded by the Act, Regulation, or Rule.
The court emphasized that the rules of natural justice complemented rather than supplanted Rules and Regulations. It underscored the importance of the rule of law, which requires that power be exercised justly, fairly, and reasonably rather than arbitrarily. Consequently, the appeal was dismissed.
In conclusion, the Supreme Court upheld constitutional values in the Delhi Transport Corporation v. D.T.C. Mazdoor Congress case by finding that Regulation 9(b), allowing the Delhi Transport Corporation to terminate permanent employees without reason or an opportunity to be heard, was inconsistent with natural justice principles and violated Article 14 due to its arbitrariness.
Written by:
Advocate Muskan Chauhan